Obama announces initiatives for middle class

President Barack Obama is offering new ideas meant to help struggling people pay bills and care for their families, aiming to help a middle-class he says has been "under assault for a long time."

ASSOCIATED PRESS

WASHINGTON - President Barack Obama is offering new ideas meant to help struggling people pay bills and care for their families, aiming to help a middle-class he says has been "under assault for a long time."

Obama and Vice President Joe Biden outlined a series of proposals that will be in Obama's budget next month.

They include a doubling of the child care tax credit for families earning under $85,000, a program to cap student loan payments for people carrying a big college debt burden and aid for families taking care of elderly relatives. The president on Monday spoke to members of the task force, led by Biden, that he appointed to help the middle class. Obama is ensure those in economic distress that he hears them.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

WASHINGTON (AP) - President Barack Obama, determined to show he understands middle-class struggles, is offering new initiatives meant to help people pay bills and save for retirement. Obama was ready to announce the new steps Monday in a partial preview of his State of the Union address.

The proposals to be unveiled by Obama and Vice President Joe Biden at the White House include a doubling of the child care tax credit for families earning under $85,000; a $1.6 billion increase in federal funding for child care programs and a program to cap student loan payments at 10 percent of income above "a basic living allowance."

His initiatives also include expanding tax credits to match retirement savings and increasing aid for families taking care of elderly relatives. That program would also require all employers to provide the option of a workplace-based retirement savings plan.

Obama is seeking to offer some attractive options to taxpayers, mindful of recent setbacks including the loss of a traditionally Democratic Senate seat in Massachusetts to Republican Scott Brown. Monday's rollout is designed to show sympathy with a frustrated public. "We are fighting every single day to put Americans back to work," Obama said in a statement released by the White House.

The proposals are the result of the work of a middle class task force that Biden had headed.

The White House says the proposals are aimed at the "sandwich generation" - Americans struggling to care for both their children and their parents. The proposals fit into the economic message of his prime-time address to the nation on Wednesday, one that is likely to cover financial regulations, energy, education, immigration and a push to change the political tone in Washington.

White House advisers see Wednesday's State of the Union speech as a key opportunity for Obama to recalibrate his message to better connect with the public and to reset his presidency after stinging setbacks.

Obama has promised a sharper focus on jobs and the economy as the dust settles from the punishing loss in Massachusetts. Brown's victory put the seat in the hands of Republicans for the first time in decades and took away the Democrats' 60-vote supermajority in the Senate.

Obama and fellow Democrats are trying to regroup to head off more populist anger and stem more losses of congressional, gubernatorial and legislative seats in the 2010 midterm elections. Obama's poll numbers are also off - primarily because of the slow economic recovery and double-digit unemployment. A majority of Americans also have turned against health care reform, the president's signature legislative effort now in jeopardy.

Under the president's proposals, families making under $85,000 a year would see their child care tax credit nearly doubled. Families making under $115,000 would also see at least some increase in their tax credit as well. Obama will also call for the allocation of $100 million to assist families caring for aging relatives by providing help with transportation, adult day care and in-home aids.

The initiatives also focus on savings, requiring employers that don't offer work-based retirement plans to enroll their employees in a direct deposit retirement account, unless the employee opts out. The cost to employers would be offset by new tax credits, and the administration says the smallest firms would be exempt.

Obama will also call for caps on some student loans, limiting a borrower's payments to 10 percent of his or her income, and forgiving all remaining debt after 10 years of payment for those in public service work - and 20 years for all others.

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AP White House Correspondent Jennifer Loven contributed to this report.

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